Labor: Retaliation—One of 2012’s top labor and employment concerns

As we near the end of the year, we are already seeing top 10 and other annual highlights or “what to watch for” lists, including top employment law issues for 2012 and/or 2013. Every list probably will (and should) include the National Labor Relations Board’s (NLRB) attack on social media policies and anything else that could conceivably chill protected activity, the impact that President Obama’s re-election will have on employers, and employers’ efforts to deal with rapidly changing technology.

Many of those lists will not include retaliation claims. Retaliation may no longer be “news,” but look at any regular compilation of employment law decisions and developments and perhaps no topic is more prevalent in court decisions. A trio of federal district court decisions from a two-day period at the end of November underscore the continuing importance for employers to be vigilant against these claims. Employers need to continue to maintain the highest awareness of these potential claims and how to minimize the risk from them.

One of these decisions, Lard v. Alabama Alcoholic Beverage Control Board, in part examines the reach of “third-party retaliation” claims. On Nov. 28, the Middle District of Alabama rejected the employer’s motion to dismiss a third-party retaliation claim. Specifically, Andy Lard alleged that he was retaliated against because a co-worker he was dating complained to their employer of race-based pay disparity. Lard alleged he was subjected to extra scrutiny and then terminated after being falsely accused of stealing money from an evidence locker.

Lard is an application of the U.S. Supreme Court’s decision last year in Thompson v. North American Stainless, in which the high court confirmed that a retaliation claim under Title VII of the Civil Rights Act of 1964 could arise where action was taken against an employee whose fiancée and co-worker had exercised her rights under Title VII. The Lard court recognized that it was potentially taking Thompson one step further because Lard was not engaged to the co-worker whose activities were the basis of his retaliation claim, but said that the matter could be revisited after some discovery had taken place. (There are other claims in this case not addressed here.)

Still, Lard is a reminder of the potential sweep of retaliation claims—at what point is a relationship too attenuated to form the basis of a retaliation claim? Will an employee be able to survive a motion to dismiss and cause an employer at least to incur the cost of discovery by simply finding a co-worker who has exercised his statutory rights, and claiming that employee is a good friend?

The day before, the Middle District of Pennsylvania denied a motion to dismiss in Carroll v. Clifford Township. In a different way, this case also raises the question, what are the limits on actionable retaliation? In this case, the court allowed a First Amendment retaliation claim to proceed despite an unusual span of time between the predicate exercise of legally protected rights and the alleged retaliation. Carroll filed a state court lawsuit against the Township in August 2009. It was not until August 2012 that Carroll filed his retaliation suit, claiming a campaign of harassment against him in the interim caused by his 2009 filing. The court relied in part on other actions in the interim as the potential predicate of a retaliation case in denying the Township’s motion to dismiss.

Like Lard, Carroll is only a motion to dismiss. But it does raise the question, once an employee is in the protected class of “employees who have exercised their legal rights and therefore may have a retaliation claim,” when, if ever, is the employee no longer in that protected class?

Perhaps of some comfort to employers is the Western District of Virginia’s decision the same day in Crews v. Ennis, Inc., in which the court held that James Crews did not have a retaliation claim for complaining to the employer about certain vulgar remarks. Crews was terminated for inciting other employees to file complaints against the company. The court found that Crews did not have a Title VII retaliation claim because the conduct complained of was not actionable under Title VII.

In order to have a retaliation claim, the court said, an employee must first have a subjective belief that he is complaining about unlawful activity. Second, however, the employee must show that that belief is objectively reasonable, and Crews failed to do that. In other words, the court held that Crews did not have a retaliation claim because it was not objectively reasonable for him to consider the conduct of which he complained as unlawful.

The court stopped short of saying that Crews must prove harassment, but dismissed the possibility that what it found were merely crude and vulgar comments might form the basis of unlawful activity. Although Crews provides limited comfort to employers dealing with day-to-day issues—an employee who has made complaints such as Crews did should be considered as a potential retaliation claimant—it is nice to see some limits on retaliation claims.

Retaliation remains a highly active area of litigation with uncertain boundaries. Employers should consider any employee with an identifiable connection to legal complaints, internal or external, to be a heightened risk when taking adverse action. In litigation, arguments such as those put forth in the above cases can and will be made, but from a preventive standpoint, the goal is not to be in such litigation.

To that end, there is no substitute for ensuring before taking advance action for the ability to articulate a strong business-driven reason for adverse action against any such employee. Also critical is training managers on how to properly deal with complaining employees (or the fiancés, boyfriends, etc. of complaining employees) to minimize risk to the company—it is human nature to have some hostility toward employees who complain, and it is advisable to help managers understand how to manage those situations to keep themselves and the company out of trouble. Retaliation may no longer be a headline, but it remains as important for employers as perhaps any employment law issue.